During Apple’s Q1 2018 earnings call today, Tim Cook addressed Apple’s on-going iPhone battery replacement program and controversy concerning its practice of slowing down iPhones with aging batteries. Cook was asked about whether or not Apple sees the iPhone battery repair program having an effect on upgrade rates moving forward.
Investor Toni Sacconaghi of Bernstein asked Cook if Apple expects iPhone upgrade rates to decrease now that customers are aware of the fact that they can have their batteries replaced for a jump in performance. Cook, however, said that Apple never even considered that in making the decision.
The Apple CEO explained that when deciding to lower the price of iPhone battery replacements and become more transparent about how batteries age, the company wasn’t thinking about the effect it could have on upgrade rates. Instead, Cook said that Apple did it simply because it was the right thing to do:
We did not consider what the battery program would do for upgrade rates. Sitting here now, I don’t know how it will impact upgrades. We did it because we saw it as the right thing to do for our customers. The effect on upgrades was not in our thought process in deciding what to do.
Cook also touched on long-term iPhone reliability, saying that in general iPhone reliability “is fantastic.” He specifically cited the pre-owned iPhone market, which he said is good for Apple in that it ultimately increases the iPhone user base.
Essentially, you have iPhone users with the top-tier device who upgrade every year. Those people either sell their old device or trade it in when it’s time to upgrade. Thus, you now have two iPhone users, one with the latest device and one with a pre-owned device, as Cook explains:
The way I look at this, generally what we see with iPhone is that the reliability of iPhone is fantastic. The previously owned market has expanded in units over the years and you see carriers and retailers having very vibrant programs around trading iPhones in because iPhone has the largest residual rate on it.
It acts as a buffer for the customer to buy a new one and it winds up with a customer somewhere else having a previously owned iPhone. I view this as a positive as it increases iPhone user base.
You can read more of Tim Cook’s comments in our full live blog recap right here.
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